Partnering - working across organisations (Seminar 2)
1. Introduction
This wiki will look at whether working across organisations – more commonly known as partnerships. By the end of this wiki, readers will be able to determine whether partnerships and working across organisations is a new trend in management. Definition of Partnering is "establishing a long term win-win relationship based on mutual trust and teamwork, and on sharing of both risks and rewards. Partnering arrangement can be between labour and management, subordinates and the executive, suppliers and customers, and suppliers and suppliers. The objective is to focus on what each party does best, by sharing financial and other resources, and establishing specific roles for each participant". BusinessDictionary
It is important to consider that partnerships across organisations of varying sectors - public sector, private sector and third and how they may differ amongst themselves. In addition to this, it will look at how effective partnerships are across both small or large organisations.
In order to understand whether partnerships are a new trend in management this wiki will firstly define what a partnership is. Secondly it will look at how organisations have worked with each other at different time periods throughout the last century. It will be done using statistics of how the amount of partnerships has changed in order to establish whether it is a new trend, or something that has been widely used already. Thirdly the Wiki will examine whether partnerships are really management, or are they more of a strategic alliance made between organisations in order to be able to outsource operations that are not core to an organisation.
Below is a video on how a large public sector organisation implements partnerships well - and the process of how it became successful:
For further reading on public-sector partnerships and health agencies in particular, please click here
2. History
Inter-organisational relations in academic studies was started by sociologists in the 1960s. It was based on resource dependence, where organisations try to retain autonomy but have to engage to obtain resources and goals. In the 1970s economists took into account efficiency of partnering across organisations, this includes transactions in markets, hierarchies or hybrids.
The partnering concept was one of the key elements to come out of the Egan Report "Rethinking Construction", back in 1998. Egan stated: "Partnering involves two or more organisations working together to improve performance through agreeing mutual objectives, devising a way for resolving any disputes and committing themselves to continuous improvement, measuring progress and sharing gains."
However, the concept had existed long before the Egan report. The Bovis/Marks & Spencer partnering arrangement dates back to the mid 1920's and it is understood that BAA, for example, has had much success over many years with its framework agreements.OsborneClarke
Nowadays, it is rising in academic research (Cropper et al, 2008) e.g. new product development (e.g. Ateş et al., 2015; Badir & O'Connor, 2015; Caner & Tyler, 2015), such as Disney and Vans, who joined together to make a new innovative shoe collection.
3. Structures
Hierarchy: A hierarchy is the traditional organizational structure that places people performing similar work into groups under a manager. The managers report to higher levels of authority until responsibility is centralized under the president or CEO at the top. The higher levels of the organizational structure delegate authority to make decisions to the lower levels, but when an unforeseen situation occurs, major decisions are made at the top. When the marketplace changes unpredictably, information about the change has to travel up the organization, and the resulting decisions have to travel down again to the working level. The hierarchy is slow to react in such quickly changing markets. (M.Begum)
The above spectrum is adapted from original work by Todeka & Knoke in 2005. It attempts to explain the differences in organisational relationships by using a continuum or spectrum as its named. The key difference it uses is formalisation. They then have placed the types of inter-organisational relationships by the degree of formalisation.
One example on the high end of the scale is a merger or acquisition. The aim of mergers and acquisitions is to create wealth for the shareholders and usually this is accomplished through synergistic expectations (Reseanu, 2011). The end result of a merger is usually a completely new company joint owned by two or more older companies however an acquisition usually results in the companies working under one name whether this be immediately or in the near future. An example of this in the UK is EE. In Summer 2016 EE officially joined the BT Group creating the UK's biggest telecoms company but ruled out scrapping the EE brand (BT, 2016).
On the other end of the spectrum we have organisational relationships with less integration and formalisation. An example is a subcontractor network which according to Knoke is "inter-linked firms where a subcontractor negotiates its suppliers' long-term prices, production runs, and delivery schedules" (Knoke, 2001). Actions sets are another type of organisational relationship which ranks low on the spectrum. These relationships are short-lived coalitions where members of two or more firms coordinate their lobbying efforts to influence public policy making.
Therefore to summarise the forms of collaboration and the spectrum itself, it is clear to see that the "High" and "Low" axis titles could easily be interchanged with "long-term" and "short-term". Relationships which are more formal are often for the long term and are in line with organisational strategy. The process of completing a merger or joint venture is a costly, long-winded one therefore it must be in the company's best interest to complete the move whereas with market relations and action sets, the time frame is a lot shorter and to complete a specific short term goal.
Another example includes Marks and Spencer's partnership with charities.
Started in 2005, M&S are in conjunction with a number of charities such as 'Shelter', Oxfam and Unicef.
These two organisations together have raised £7.7 million with the aim to 'ensure no one fights bad housing and homelessness on their own'.
Activities include: In store donations of clothing samples that cannot be sold, and involving the public community and employees. (Marks and Spencer, 2015)
4. Motives
In a questionnaire conducted by Kings College London, it was found that 88 per cent of respondents use partnerships with the aim of engaging a broader audience. 84 per cent claimed that the partnership resulted in a successful project outcome in 2014. 83 per cent said that partnerships that enhanced value and money. Lastly, 97 per cent said partnerships enhance the work their organisation. However when asked if the partnership was evaluated, only 57 per cent confirmed this.
There are many possible benefits of partnering. For example:
Increased customer satisfaction;
Better value for the client;
Creation of an environment that encourages innovation and technical development;
Design integration with specialists in the supply chain;
Better predictability of time and cost;
Shorter overall delivery period;
Stability, which provides more confidence for better planning and investment in staff and resources;
The opportunity for regular relationship/contract review points at which the parties' performance and the relationship between them can be assessed;
The parties jointly manage risk, often through a shared risk register;
The possibility to share and transfer knowledge and experience between the parties;
The opportunity to acquire relevant intellectual property, extensive knowledge of designs and technical expertise that will assist in performance of subsequent projects for the employer; and
A potential reduction in disputes which reduces the legal and administrative expense of a project and can free management for productive tasks.
The Disadvantages
Potential disadvantages of partnering include:
Partnering often requires high-level management time and dedication to be successful and therefore a small project may not justify such level of management investment;
Whilst partnering often leads to further work from a client, this is not guaranteed. The risk therefore is that "investment" from all parties in collaborative teams may be lost;
If the relationship between the employer/supply chain is too close, there is a risk that the employer can become increasingly involved in the results of shared decisions and therefore becomes less able to provide oversight, compared to a traditional 'arms -length' relationship;
Partnering principles need to be carefully drafted so as not to be construed as sharing any risk which has been allocated to the contractor/supply chain or employer elsewhere in the contract;
The parties must be careful not to create a partnership as defined by the Partnership Act 1890 (i.e. a relationship which subsists between persons carrying on a business in common with a view to profit) as this would mean that they would have joint responsibility for each others' debts, at least in relation to any project undertaken by the parties. Therefore a 'No Partnership' clause should be inserted into the agreement – although this may not be enough to prevent a court finding that a partnership does in fact exist, if all the indications of a partnership are present through the behaviour of the participants. out-law.com
Sloan school article Attain benefits of scale through effective global collaboration: Organisations can set up teams with multiple disciplines to get a more dynamic work process, rather than being locked up in one discipline's way of thinking. With this multi-disciplinary team, gaps and issues can be found more quickly and a more elaborate process of solving can be applied, often resulting in more thorough solutions.
Drive work force engagement and performance: With a bigger field of workers, patterns can be sought in which employees are high performers, which contribute a lot to the company, and how to energize the employees in general. Through the collaboration the companies can compare the results with each other and see how they can help each other in becoming more productive.
Align collaborative with business partners and external stakeholders: the managers of the companies are mapping and monitoring the various projects going on within the collaborative and see whether these projects need aid in the sense of funding or managerial guidance.
Minimize network inefficiencies and costs: Although collaboration is often seen as a virtue, too much collaboration at too many organizational levels can be a negative. It is important to reduce network connectivity at points where collaboration fails to produce sufficient value.
5. 7 Tips for a Successful Business Partnership
1 - Start by creating a shared Vision & Mission
2 - Make sure each partner's needs and expectations are addressed
3 - Identify and utilize the strengths of each partner
4 - Support the partnership's limitations
5 - Set company and individual goals
6 - Handle disagreements, disappointments and frustrations early
7 - Define job roles for each partner, including accountability Business. Know-how
Is it a new trend inmanagement?
Looking at the research provided, this isn't a new approach to partnerships, however it is considered a new trend
6.Conclusion
To sum up, this wiki explains the history of partnerships. Even though they have been started in the 1960s, they are now being promoted by multiple organisations. Depending on the changes in public sector, the specialisation of knowledge and the complexity of a problem lead organisations to work together even globally and they move away from dominance of hierarchy to knowledge of economy, this is explained in the powerpoint. Finally, in this wiki we explored the advantages and the disadvantages of business partnerships but we also discussed and highlighted the main points of how they can be successful starting by sharing the same vision and goals
Partnering - working across organisations (Seminar 2)
1. Introduction
This wiki will look at whether working across organisations – more commonly known as partnerships. By the end of this wiki, readers will be able to determine whether partnerships and working across organisations is a new trend in management.Definition of Partnering is "establishing a long term win-win relationship based on mutual trust and teamwork, and on sharing of both risks and rewards. Partnering arrangement can be between labour and management, subordinates and the executive, suppliers and customers, and suppliers and suppliers. The objective is to focus on what each party does best, by sharing financial and other resources, and establishing specific roles for each participant". BusinessDictionary
It is important to consider that partnerships across organisations of varying sectors - public sector, private sector and third and how they may differ amongst themselves. In addition to this, it will look at how effective partnerships are across both small or large organisations.
In order to understand whether partnerships are a new trend in management this wiki will firstly define what a partnership is.
Secondly it will look at how organisations have worked with each other at different time periods throughout the last century. It will be done using statistics of how the amount of partnerships has changed in order to establish whether it is a new trend, or something that has been widely used already.
Thirdly the Wiki will examine whether partnerships are really management, or are they more of a strategic alliance made between organisations in order to be able to outsource operations that are not core to an organisation.
Below is a video on how a large public sector organisation implements partnerships well - and the process of how it became successful:
For further reading on public-sector partnerships and health agencies in particular, please click here
2. History
Inter-organisational relations in academic studies was started by sociologists in the 1960s. It was based on resource dependence, where organisations try to retain autonomy but have to engage to obtain resources and goals. In the 1970s economists took into account efficiency of partnering across organisations, this includes transactions in markets, hierarchies or hybrids.The partnering concept was one of the key elements to come out of the Egan Report "Rethinking Construction", back in 1998. Egan stated:
"Partnering involves two or more organisations working together to improve performance through agreeing mutual objectives, devising a way for resolving any disputes and committing themselves to continuous improvement, measuring progress and sharing gains."
However, the concept had existed long before the Egan report. The Bovis/Marks & Spencer partnering arrangement dates back to the mid 1920's and it is understood that BAA, for example, has had much success over many years with its framework agreements.OsborneClarke
Nowadays, it is rising in academic research (Cropper et al, 2008) e.g. new product development (e.g. Ateş et al., 2015; Badir & O'Connor, 2015; Caner & Tyler, 2015), such as Disney and Vans, who joined together to make a new innovative shoe collection.
3. Structures
Hierarchy:A hierarchy is the traditional organizational structure that places people performing similar work into groups under a manager. The managers report to higher levels of authority until responsibility is centralized under the president or CEO at the top. The higher levels of the organizational structure delegate authority to make decisions to the lower levels, but when an unforeseen situation occurs, major decisions are made at the top. When the marketplace changes unpredictably, information about the change has to travel up the organization, and the resulting decisions have to travel down again to the working level. The hierarchy is slow to react in such quickly changing markets. (M.Begum)
Market,
Hybrids
Forms of collaboration
The above spectrum is adapted from original work by Todeka & Knoke in 2005. It attempts to explain the differences in organisational relationships by using a continuum or spectrum as its named. The key difference it uses is formalisation. They then have placed the types of inter-organisational relationships by the degree of formalisation.
One example on the high end of the scale is a merger or acquisition. The aim of mergers and acquisitions is to create wealth for the shareholders and usually this is accomplished through synergistic expectations (Reseanu, 2011). The end result of a merger is usually a completely new company joint owned by two or more older companies however an acquisition usually results in the companies working under one name whether this be immediately or in the near future.
An example of this in the UK is EE. In Summer 2016 EE officially joined the BT Group creating the UK's biggest telecoms company but ruled out scrapping the EE brand (BT, 2016).
On the other end of the spectrum we have organisational relationships with less integration and formalisation. An example is a subcontractor network which according to Knoke is "inter-linked firms where a subcontractor negotiates its suppliers' long-term prices, production runs, and delivery schedules" (Knoke, 2001). Actions sets are another type of organisational relationship which ranks low on the spectrum. These relationships are short-lived coalitions where members of two or more firms coordinate their lobbying efforts to influence public policy making.
Therefore to summarise the forms of collaboration and the spectrum itself, it is clear to see that the "High" and "Low" axis titles could easily be interchanged with "long-term" and "short-term". Relationships which are more formal are often for the long term and are in line with organisational strategy. The process of completing a merger or joint venture is a costly, long-winded one therefore it must be in the company's best interest to complete the move whereas with market relations and action sets, the time frame is a lot shorter and to complete a specific short term goal.
Another example includes Marks and Spencer's partnership with charities.
Started in 2005, M&S are in conjunction with a number of charities such as 'Shelter', Oxfam and Unicef.
These two organisations together have raised £7.7 million with the aim to 'ensure no one fights bad housing and homelessness on their own'.
Activities include: In store donations of clothing samples that cannot be sold, and involving the public community and employees.
(Marks and Spencer, 2015)
4. Motives
In a questionnaire conducted by Kings College London, it was found that 88 per cent of respondents use partnerships with the aim of engaging a broader audience. 84 per cent claimed that the partnership resulted in a successful project outcome in 2014. 83 per cent said that partnerships that enhanced value and money. Lastly, 97 per cent said partnerships enhance the work their organisation. However when asked if the partnership was evaluated, only 57 per cent confirmed this.
http://www.kcl.ac.uk/cultural/culturalenquiries/partnership/Full-report.pdf
Advantages and Disadvantages of Partnering
Partnering: The Advantages
There are many possible benefits of partnering. For example:
The Disadvantages
Potential disadvantages of partnering include:
Sloan school article
Attain benefits of scale through effective global collaboration: Organisations can set up teams with multiple disciplines to get a more dynamic work process, rather than being locked up in one discipline's way of thinking. With this multi-disciplinary team, gaps and issues can be found more quickly and a more elaborate process of solving can be applied, often resulting in more thorough solutions.
Drive work force engagement and performance: With a bigger field of workers, patterns can be sought in which employees are high performers, which contribute a lot to the company, and how to energize the employees in general. Through the collaboration the companies can compare the results with each other and see how they can help each other in becoming more productive.
Align collaborative with business partners and external stakeholders: the managers of the companies are mapping and monitoring the various projects going on within the collaborative and see whether these projects need aid in the sense of funding or managerial guidance.
Minimize network inefficiencies and costs: Although collaboration is often seen as a virtue, too much collaboration at too many organizational levels can be a negative. It is important to reduce network connectivity at points where collaboration fails to produce sufficient value.
5. 7 Tips for a Successful Business Partnership
1 - Start by creating a shared Vision & Mission
2 - Make sure each partner's needs and expectations are addressed
3 - Identify and utilize the strengths of each partner
4 - Support the partnership's limitations
5 - Set company and individual goals
6 - Handle disagreements, disappointments and frustrations early
7 - Define job roles for each partner, including accountability Business. Know-how
Is it a new trend in management?
Looking at the research provided, this isn't a new approach to partnerships, however it is considered a new trend
6.Conclusion
To sum up, this wiki explains the history of partnerships. Even though they have been started in the 1960s, they are now being promoted by multiple organisations. Depending on the changes in public sector, the specialisation of knowledge and the complexity of a problem lead organisations to work together even globally and they move away from dominance of hierarchy to knowledge of economy, this is explained in the powerpoint. Finally, in this wiki we explored the advantages and the disadvantages of business partnerships but we also discussed and highlighted the main points of how they can be successful starting by sharing the same vision and goals